The long range goal of this project is to elucidate the role of extracellular matrix (ECM) in the differentiation of Schwann cells. Contact with basement membrane ECM by Schwann cells is required for their terminal differentiation, including ensheathment and myelination of axons. During ensheathment the Schwann cell plasma membrane becomes segregated into distinct functional regions that interact with either axons or the basement membrane. These interactions are mediated by Schwann cell adhesion receptors. The goal of the studies described in this proposal is to elucidate the role of membrane associated heparan sulfate proteoglycans (HSPGs) in Schwann cell-ECM interactions. Previous work resulted in the identification and cloning of 2 major HSPGs synthesized by Schwann cells: glypican, a lipid anchored HSPG, and N-syndecan, a member of the syndecan family of transmembrane proteoglycans. The latter family of HSPGs is characterized by highly conserved cytoplasmic domains that have been proposed to interact with cytoskeletal structures. Based on their biochemical properties we hypothesize that glypican and N-syndecan carry out essential but distinct functions in the adhesive interactions between Schwann cells and the basement membrane. The proposed studies will use Schwann cell differentiation as a cell culture model of ECM dependent development to examine the following questions. What is the subcellular localization of glypican and N-syndecan in the Schwann cell plasma membrane with respect to basement membrane and axons during the process of ensheathment? What are the effects of overexpression or inhibition of glypican and N-syndecan synthesis on Schwann cell differentiation, including effects on cell adhesion and spreading in vitro and ECM- dependent ensheathment of axons? Does the N-syndecan cytoplasmic domain interact with the Schwann cell cytoskeleton; what structural features are important for this interaction; and what is the importance of this interaction for Schwann cell adhesion, spreading and ensheathment? Is the expression of N-syndecan or glypican by Schwann cells regulated by ECM or axonal contact? Finally, what is the structure and function of a novel high affinity N-syndecan ligand that is secreted by Schwann cells? The results of these studies will provide important new information on the function of membrane associated HSPGs.